Well, I'll say this @Gravy Train, you have very interesting observations even if they appear to be somewhat obstinately misreading the mechanics of how the property market works.
Perhaps we're trying to self-sooth with these kinds of hopes, but those of us in the industry think rates coming back down into the 5's and staying there is going to provide a psychological boost to the buyers needing to make a move. If that happens it's not going to deflate your presumed bubble, it's just going to lock in what you categorize as a $200K premium further. I suppose you can throw up your hands and complain about how stupid they are but there's 50 years of homeownership data supporting a conclusion it'll end up working out for them.
I don't know where you're located but I'll add we'll likely need significant job losses, outflow of residents leaving the state, or both, to result in your desired outcome. Both are the kinds of policy results that get elites fired or replaced while high property values are mostly just fucking over those who haven't got in yet.